What is Business Intelligence and how can it be used?
Main theme of Business Intelligence
Business intelligence is all about reflection. Business owners need relevant information in order to make quality decisions about the way they run things and the outcomes they are seeking. They want to make better decisions, and to improve profits, as well as the products and services that they offer to consumers. Basically all of the data that a business creates about its processes can be utilized in business intelligence.
How it works
The first stage of business intelligence comes when the business gathers data. It´s possible to create a business intelligence framework only when you have the data upon which you can make decisions. The data comes through processes of data gathering, which must be focused and objective, and will be held in databases within various applications. It is then extracted, transformed and loaded into the Data Warehouse which contains something like ‘raw material’. The raw data is processed in order to serve its purpose – to bring valuable and relevant information to the business user. The output of the processing can be in the form of Online Analytical Processing (OLAP) analysis, a technology that enables its users to easily see and follow business trends, for example. Or the output can be a simple report in the form of a Microsoft Excel table. Regardless of the format, Business Intelligence provides clearer information that is more easily understood by its main consumers.
Example of use
One example may be the use of a business’s website traffic data, to establish where their visitors are coming from, and which parts of the site they are buying from. The information that is derived from the data can inform website redesign, such as changing parts of their site so that it offers visitors what they want, thus leading to improved sales.
What data to gather?
It is important to remember what the business needs, to make sure that the gathered data is of reasonable quality. Having poor data can compromise any business intelligence work that is undertaken.
The data that is found needs to be stored carefully so that the decision-makers or teams can find it and use it quickly. Then the data has to be analyzed, which could mean using reports, or other ways of presenting data. Once the data is analyzed, it can be acted upon and decisions can be made.
One simple example is that of mail marketing. A company may have previously spent thousands of dollars mailing out letters and offers to thousands of prospects, and only obtained a small return of around one per cent of the prospects responding. However, once they have used business intelligence processes to gather data on just who responds and how, they can refine their mailing list so that they only send to a much smaller set of prospects, who are guaranteed to have an interest in the offer. This results in bigger profits with more targeted mailing.
How it can help
First of all, this kind of thing can save businesses money. If they keep blundering along the same path, making a loss with processes and decisions that only cost money with little return on investment, then they will eventually either make a huge loss or go out of business.
Business intelligence is all about reflecting on what you are doing, and the results of that work. If a business is effectively able to reflect upon what is going wrong and what is working, they should be able to use that information to make everything they do better, which leads to growth. The lesson to be learned here is that, if a business can use intelligence effectively, they will grow. If they don’t, they will stagnate and perhaps even fail.